Welcome to the latest edition of AboutTheBlock! As we look back at May 4th, 2023, we can see a world that has been fundamentally transformed by the power of distributed ledger technology. From the rise of decentralized finance to the implementation of blockchain-based supply chains, it’s clear that blockchain innovation is shaping the future of nearly every industry. Join us as we explore the latest headlines, trends, and developments in the world of blockchain, and discover how this technology is continuing to revolutionize the world as we know it.
1. Bitcoin under pressure as Fed indicates potential rate increase
Bitcoin is facing pressure as the Federal Reserve has indicated the potential for a higher-than-expected increase in interest rates, causing a dip in the market early in the month. This comes after the collapse of Silvergate Capital, a major crypto-focused lender, which further affected the industry. Moreover, the recent takeover of First Republic Bank could mean an end to the financial crisis, which had been the biggest driver of Bitcoin’s rally this year. The cryptocurrency is currently hovering around the $28,137.76 mark, experiencing choppiness amidst concerns over the banking crisis, inflation, potential recession, and a bearish U.S. dollar narrative.[1][2]
2. Silvergate Capital collapse affects cryptocurrency market
The collapse of Silvergate Capital has had a significant impact on the cryptocurrency market, as the bank suspended its crypto payments network and expressed doubts over the viability of its business. Shares of Silvergate fell as much as 11%, with other crypto stocks also closing in negative territory. Some crypto heavyweights, including Coinbase Global, have dropped Silvergate as their banking partner. The discontinuation of Silvergate Exchange Network (SEN) could signal that Silvergate may consider winding down its operations. The uncertain future of Silvergate has caused concern among investors and resulted in a dip in the crypto market.[3][4]
3. Bitcoin and Ether experience dip to start May
To start off May, the leading cryptocurrencies, Bitcoin and Ethereum, experienced a dip in their prices. Bitcoin is down by almost 11% while Ethereum’s price dropped by over 9%. This dip in the market is likely due to the pending liquidation of Silvergate Capital, a crypto-friendly bank that is winding down operations and liquidating this week. Additionally, the New York State Attorney General filed a lawsuit against crypto exchange KuCoin, arguing that certain coins traded on KuCoin should have been registered as securities. This market dip serves as a reminder to cryptocurrency investors to proceed with caution when buying the dip.[5][6]